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Business, 06.10.2019 11:00 Izzyfizzy

An airline is evaluating whether or not to upgrade the engines on their old 757's. there would be an immediate savings of $5,000,000 from selling the old engines to another airline. because of the better fuel economy of the new engines, future savings are estimated to be $1,500,000 per year for the next 15 years. to pay for the new engines, the airline will withdraw money from an investment paying 9% interest per year compounded annually if the new engines cost $17,000,000, would you recommend they purchase the new engines? calculate numerical justification and give a verbal explanation.

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